Terry Heymann, director, strategic development group for the World Gold Council, at the Prospectors and Developers Association of Canada’s conference at the Metro Toronto Convention Centre, Monday, March 4, 2013. iPolitics/Galit Rodan

Rival efforts to stop the flow of conflict minerals from central Africa are duelling for supremacy in the gold industry.

At issue is just how precise controls to certify bullion as conflict-free can be, given the prevalence of recycled gold in the global market.

“It’s the world’s most recycled metal,” said Terry Heymann, director of responsible gold at the World Gold Council, which represents the twenty-three biggest gold producers globally.

On Sunday, the Prospectors and Developers Association of Canada (PDAC) conference held a workshop on the status of several conflict mineral monitoring issue, a critical issue for the mining industry for the past decade and a half after wars in Sierra Leone and sub-Saharan Africa brought the link between resources and violence to light.

Only 2,500 tons of gold is produced annually, a small amount to monitor.

But because gold is kept by individuals as both a precious item and as currency, smelters and refiners live with a multitude of intakes that are difficult to track, said Haymann.

Toronto is the the centre of Canadian mining this week as the Prospectors & Developers Association of Canada’s annual convention draws tens of thousands to the city’s core. iPolitics is there. For more coverage through the week, click here.

“Asking people to understand who has handled their gold before its got to them and know everybody that’s been involved along the way is very much like looking at a $10 note, and every time you receive a $10 note, you have to know everybody who has touched that $10 note before it has got to you,” said Heymann.

Around 40 per cent of the world’s gold comes from recycled sources.

Putting requirements on manufacturers to source their gold is even more difficult, given how far they are from the metal’s source.

“That gold goes through very many supplies,” said Heymann. “Gold has very different supply chain characteristics.”

The U.S. government disagrees.

Last summer, the Securities and Exchange Commission (SEC) released new rules that would force mineral producers working inside or around the Democratic Republic of Congo (DRC) — which has suffered from both civil war and violent unrest for the past seventeen years — to disclose whether or not their product could be profiting militias.

The rule, known as Amendment 1502, would only impact gold, wolframite, cassiterite and coltan miners. Tin is derived from cassiterite and tungsten from wolframite.

Amendment 1502 would also require manufacturers who source from the DRC region to perform some measure of due diligence and see if they can determine whether the minerals fuel conflict. The results will be filed in a new disclosure document.

The rule was suppose to go into effect in the next year, but the U.S. National Association of Manufacturers, the U.S. Chamber of Commerce and the Business Roundtable have sued the SEC over the rule.

With that rule stalled, the World Gold Council would like the ambitious goal of trying to get companies to be certain of their sourcing replaced with rules that put a premium on a company’s efforts to monitor their product’s origins.

The council’s “Conflict-Free Gold Standard,” launched last October, will require members to abide by a certain degree of internal oversight regarding their product’s source.

They’ll have to publish information showing: they’ve assessed local conflicts, their operations’ vulnerability to fuelling those conflicts, and their own controls to keep conflict minerals out of their production.

Ironically, both initiatives borrow in some form the work done by the OECD on due diligence standards for conflict minerals in supply chains, published in May 2011.

But manufacturers are not directly affected by the World Gold Council’s standard, while Amendment 1502 forces upstream metal users to comply.

Another chief difference is the way the information on conflict minerals will be published.

In Amendment 1502, companies will file a conflict mineral report that the World Gold Council says will leave them exposed to allegations of fuelling conflict because they couldn’t conclusively determine their product’s source.

The standard, on the other hand, would only force the publication of information regarding the company’s ability to do its own oversight.

When the SEC solicited opinions on Amendment 1502, the council expressed worry that the geographical nature of the rule would unfairly stigmatized gold producing-countries working in DRC-neighbour countries, most notably Tanzania.

It worried the drop in gold production would lead to the metal being replaced by copper in electronics and platinum in jewellery.

An amicus brief was filed by former Ambassador Jendayi Frazer, who served as assistant secretary of state for African Affairs from 2005 to 2009, that called Amendment 1502 into question because of the economic impact it will have on artisinal miners and miners in the legitimate gold industry in the region around the DRC.

Other efforts to quell the trade in conflict minerals, which have both influenced and are influenced by the World Gold Council and U.S. government’s initiatives, include Public-Private Alliance for Responsible Minerals Trade and the International Conference of the Great Lakes Region’s regional certification scheme.

The World Gold Council stopped short of endorsing the lawsuit against Amendment 1502.

“We recognize some of the concerns that have been voiced around section 1502,” said Heymann. “We’ll wait and see what the results will be.”